Current Futures: Dow +11.00, S&P +0.90, NASDAQ +0.60
Asian markets rose as commodity stocks pulled the regional indexes higher, similar to what happened during the U.S. trading hours, where energy and raw material stocks were the biggest gainers.
Commodity stocks advanced at a strong pace over the last few sessions, as crude oil reached the highest value in the last 8-months of trading, and as the price of metals gained almost 4% on Tuesday. Every fluctuation observed for the price paid for commodities is directly reflected on the company’s balance sheets, since it affects the company’s profit margin.
Raw materials advanced on Tuesday fueled by the investor’s view that the global economy is recovering. In lieu of this, copper jumped nearly 5% on the day, TheLFB-Forex.com Trade Team said. Moreover, the dollar index declined the most in a month on Tuesday, something that further fueled the rally in the commodity market.
Despite the gains seen in the commodity markets in the last few months, a release showed tonight that the price Japanese wholesalers pay for their energy and raw materials fell 5.4% in May, the most in the last 22 years. TheLFB-Forex.com Trade Team said that the current release adds new fears that the Japanese economy is heading towards a strong deflationary period, similar to the one seen over the last decade. Additionally, a different report showed that machinery orders tumbled 5.4% in April in Japan, much worse than expected, reaching a 27-year low.
Overnight, the Japanese Nikkei rose 97.81 points (1.00%) to 9,884.62. The Australian S&P/Asx gained 75.70 points (1.92%) to 4,010.60.
Crude oil for July delivery was recently trading at $70.80 per barrel, higher by $0.80.
Gold for July delivery was recently trading higher by $4.30 to $959.00.
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